What does the concept of “human capital” mean to Hudson Valley organizations? Do you believe in “people power” that people, not technology, machinery, equipment, manufacturing and production facilities are the most important resource of the 21st Century?
Amazon.com draws most of its people power from the business web. Looking only at books, we find that in addition to its own management and staff, Amazon”™s human capital base includes:
- Countless authors and readers who generate online book reviews.
- Publishers that provide sophisticated content.
- Millions of Amazon “associates” who hot-link to the site and extend its sales network.
- Distribution, requiring trained personnel at Ingram books, FedEx, UPS and many electronic venders for using their Kindle e-book reader.
To define and shape the “human capital” strategy, several steps are important. The business must keep everyone riveted on meeting the needs of end-customers and treat employees, vendors, suppliers and contractors as investors. These people can bring brainpower, know-how, energy and their capacity for innovation freely to your firm.
How much is relationship capital worth? What value should be placed on connections with customers, suppliers and other partners? Does your management team treat employees as a variable cost or think of them as long term investments in the enterprise?
In “Firms of Endearment,” authors Sheth, Sisodia, and Wolfe state that in companies like Costco, Amazon, USAA and Southwest Air all forms of human capital including suppliers, employees, customers, investors and the communities they are located in have an emotional connection with the company.
Firms of endearment focus on the purpose of using their human capital to deliver a product or service that genuinely benefits humanity and to do that better than anyone else. Does it pay? According to the authors, “Over the last ten years, firms of endearment have outperformed the S&P 500 market index by more than 8-to-1.”
Due to the Internet, customers have gained new power because everybody communicates in multiple directions. The brand is no longer an image established through print and broadcast media. All businesses, which were traditionally the seller to customers ”“ the hunter of old if you will ”“ must now become the hunted.
We must shift resources from traditional marketing to product and service innovation. Tide can say that it washes whiter, but if it doesn’t, customers will find out, in about 30 seconds. Blogs, Facebook and social media discussion groups all make it abundantly clear which detergent really washes whiter.
To become a market leader, you need to make the effort to inform your customer. After all, your competitors”™ pricing is only a click away. Successful companies provide reliable information about competitors”™ pricing, generating trust, and that is what produces relationship capital.
Honesty has always been the best policy. Today, that old saying is truer than ever before. The Internet world has no secrets. If you defraud someone on eBay, the user community banishes you by ruining your reputation. All organizations must “walk the walk” and achieve and maintain the standards that they set.
Organizations can best secure what may otherwise be an uncertain future by investing in human capital. Do you believe in “people power?” Although technology, labs, machinery, equipment, manufacturing, production and distribution facilities are the tools of the 21st century, it is human capital that makes them work.
Questions for discussion:
What is the value of our existing human capital, how can we better nurture, care for and grow it?
With information becoming universally available to everyone is transparency inevitable? If so how do we define and differentiate why the customer should choose our product or service and over anyone else?
Joe Murtagh is The DreamSpeaker, an international keynote speaker, meeting facilitator and business trainer. For questions or comments, Joe@TheDreamSpeaker.com, www.TheDreamSpeaker.com or call (800) 239-0058.
